Trust deed construction and exemption under sections 11 and 12 were treated as questions of law fit for reference.

Construction of the trust document was treated as a question of law because the assessee's charitable character depended on interpreting the instrument. Entitlement to exemption under sections 11 and 12 was also regarded as raising a legal question. On that basis, the proposed issues were held to arise from the Tribunal's order and were considered fit for reference to the High Court. The application under section 256(2) was allowed, and the Tribunal was directed to state the case and refer the questions of law for the High Court's opinion.

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Issues: Whether the application under section 256(2) was maintainable on the ground that the questions proposed, including the assessee's charitable character and entitlement to exemption under sections 11 and 12, gave rise to questions of law requiring reference to the High Court.

Analysis: The nature of the assessee under the trust document was held to depend on construction of the document, which is a question of law. The entitlement to exemption under sections 11 and 12 was also treated as involving a question of law. On that basis, the court found that the proposed questions arose from the Tribunal's order and were fit to be referred for opinion.

Conclusion: The application was allowed and the Tribunal was directed to state the case and refer the question of law for the opinion of the High Court.

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